Six Tips for Insurance Companies to Prepare for 2026 Year-End

Six Tips for Insurance Companies to Prepare for 2026 Year-End

October 30, 2026

ARTICLE SUMMARY

A smoother year-end close starts before December 31. Insurers can reduce last-minute issues by learning from the prior year, addressing estimates early, confirming investment reporting, preparing audit support as part of the close, evaluating internal controls, and monitoring applicable NAIC statutory accounting changes.

•    Debrief the 2025 close and address the largest bottleneck now.
•    Coordinate significant estimates and judgments with accounting and actuarial teams early.
•    Confirm investment classification, impairment, and reporting processes with service providers.
•    Build audit and regulatory support into the close process.
•    Review controls over year-end entries.
•    Track applicable NAIC changes.

Wasn’t it just February? The Winter Olympics were underway in Milan and Cortina, and December 31 still felt comfortably far away. Now, year-end reporting is right around the corner. For insurance companies, the good news is that there is still time to make the 2026 close smoother than the last one.

Below are some tips and reminders on what can be done now to prepare for a strong year-end close.

1. Debrief the Prior Year

If your team has not already discussed how the 2025 year-end close went, meet now. Focus on the bottlenecks that delayed reporting, created repeated questions, or required significant adjustments.

Ask the team:

• What was the biggest bottleneck or problem during the 2025 close?
• Which schedules, estimates, or third-party reports arrived late?
• Where did reviewers identify recurring errors or incomplete support?
• Which audit requests required information that was not already part of the close?
• What can we change now to prevent the same problem in 2026?

Turn the discussion into a short action list with an owner and due date. For example, if the investment rollforward was delayed because custodian reports did not include required statutory classifications, meet with the custodian and investment manager before year-end to agree on the format and delivery date.

2. Address Estimates and Judgments in Advance

The most time-sensitive year-end items are often estimates that require input from both actuarial and accounting teams. Before the final close, discuss data cutoffs, methods, responsibilities, deliverable dates, and the timing of management review. Some areas to consider:

• Reserves. Confirm the data provided to the actuary, reconcile key data to the ledger and claims or policy systems, and agree on preliminary and final analysis dates.
• Impairments. Identify investments, receivables, reinsurance recoverables, and other assets that may require impairment or admissibility analysis.
• Deferred taxes. Update temporary differences, admissibility calculations, valuation allowance considerations, and tax-planning assumptions using year-end projections.

Significant estimates should have a clear preparer, reviewer, and decision timeline. Management also needs enough time to understand changes in assumptions and determine whether additional documentation or disclosure is necessary.

3. Review Investments before Year-End

Meet with the investment manager and custodian before year-end to confirm the reporting process, delivery dates, and responsible contacts. Review how new and existing investments will be classified in the annual statement and whether any holdings require additional analysis. A sample check list to discuss are the following:

• Classification under the applicable Statement of Statutory Accounting Principles (SSAPs) and annual statement schedule
• NAIC designations, book values, fair values, and accrued investment income
• Potential other-than-temporary impairments or credit deterioration
• Affiliated investments, restricted or pledged assets, securities lending, repurchase agreements, and Schedule BA holdings
• New or unusual investments requiring additional documentation or management review
• Changes in NAIC guidance affecting investment accounting or reporting

Differences between the custodian report, investment accounting records, and the company’s statutory reporting conclusion should be resolved before annual statement preparation. The insurer remains responsible for statutory classification even when a third party supplies the data.

4. Prepare for the Audit and Regulatory Filing

Ask the auditors for the year-end request list early. If the current-year list is not available, use the prior year’s request list as a starting point and update it for significant transactions, new accounts, control changes, and known audit focus areas.

Audit support should be a byproduct of the financial close, not a separate project completed afterward. A well-designed reconciliation should already include the source report, calculation, explanation of reconciling items, preparer sign-off, and reviewer evidence.

Coordinate audit support with annual statement and regulatory reporting requirements. Amounts appearing in the general ledger, annual statement schedules, risk-based capital filing, audited statutory financial statements, and footnotes should reconcile, or differences should be documented.

5. Evaluate Internal Controls

Review the year-end process and confirm that controls remain effective during the busiest part of the reporting cycle. Pressure to complete the close should not result in unsupported workarounds, skipped approvals, or unclear evidence of review. Below are areas that should have internal controls and review processes over: 

• Manual and nonstandard journal entries posted during or after the close
• Management review of reserves, impairments, deferred taxes, and other significant estimates
• Reconciliations between source systems, the general ledger, and annual statement schedules
• User access to the general ledger, annual statement software, investment systems, claims systems, and banking platforms
• Reopening accounting periods and posting late adjustments

For year-end entries, the reviewer should evaluate more than whether the entry balances. The review should consider business purpose, source data, accounting guidance, calculation, classification, reporting period, and annual statement presentation.

6. Evaluate Changes in NAIC Statutory Accounting Guidance

Maintain a change log for NAIC activity that may affect the 2026 annual statement or 2027 implementation planning. For each item, record whether the guidance is adopted or exposed, its effective date, affected SSAPs and schedules, the applicability conclusion, required actions, and responsible owner.

Relevant 2026 topics include securities lending and restricted asset reporting under SSAP No. 1, IMR treatment in reinsurance collateral under SSAP No. 61, the extension of INT 23-01 for net negative IMR, affiliated common stock reporting in the AVR schedule, and changes affecting leases, separate accounts, and repurchase agreements. Applicability depends on each insurer’s transactions and annual statement type.

The 2026 NAIC Fall National Meeting is scheduled for November 14–17, 2026. Because additional items could be adopted or advanced before December 31, insurers should perform one final update review after the meeting and before completing the annual statement.

Frequently Asked Questions

What should insurers do now to prepare for year-end?
Start with the items that require coordination outside the accounting team. Confirm timing and responsibilities with actuaries, investment managers, custodians, tax providers, and auditors. Then work backward from filing and audit deadlines to identify when each significant estimate, reconciliation, and review needs to be completed.

What areas most often delay an insurance year-end close?
The most common delays involve reserve estimates, investment classifications and impairments, reinsurance balances and schedules, deferred tax calculations, late third-party reports, unsupported manual entries, and differences between source systems, the general ledger, and annual statement schedules. These items often involve multiple teams or outside providers, which is why they should be addressed before the final close.

What is the most useful year-end control?
A precise review of reconciliations and year-end entries is one of the most useful controls. Each material balance should tie to controlled source data, include explanations for reconciling items, and show evidence that a qualified reviewer evaluated the calculation, accounting treatment, classification, reporting period, and annual statement presentation. This review can identify both errors in the balance and weaknesses in the process that produced it.

Looking Ahead

A strong year-end close begins with an honest review of the prior year and a clear plan for the areas most likely to cause delays. By addressing estimates early, coordinating with investment providers, building audit support into the close, reinforcing internal controls, and monitoring applicable NAIC changes, insurers can reduce year-end surprises and enter 2027 with a more reliable reporting process.

For additional guidance, please contact the Larson Insurance Team.